Philippines trims national debt to ₱18.47 trillion but weak peso offsets gains

Domestic repayments helped pull the total lower, even as currency movements pushed external obligations higher.

The government managed to shave billions off the country’s debt in April, but the peso’s continued weakness prevented a bigger reduction.

Data from the Bureau of the Treasury showed that the national debt slipped 0.9% to ₱18.47 trillion as of end-April from ₱18.49 trillion a month earlier. The decline came after the government paid off more domestic obligations than it borrowed, helping offset the rising peso value of foreign loans.

The figures offer a snapshot of the balancing act facing economic managers. Government debt influences how much room authorities have for infrastructure projects, social programs, and other public spending, while rising borrowing costs can eventually ripple through the broader economy.

Domestic debt, which accounted for 67.22% of the total debt stock, fell 0.95% to ₱12.41 trillion from ₱12.53 trillion in March.

According to the Treasury, the decline was mainly driven by a net redemption of ₱121.64 billion during the month. The government issued ₱283.24 billion worth of debt securities but saw ₱404.88 billion in maturities, resulting in an overall reduction in outstanding domestic obligations.

The Treasury noted that the decline would have been larger if not for a ₱2.46-billion valuation increase in the peso equivalent of foreign currency-denominated domestic securities caused by peso depreciation.

External debt, which made up 32.78% of the total debt stock, moved in the opposite direction.

Even after the modest decline, the country’s debt load remains enormous. At ₱18.47 trillion, the national debt is still hovering near historic highs, highlighting how repayments alone are not enough when currency movements can add tens of billions of pesos to outstanding obligations in a single month.

Meanwhile, National Government-guaranteed obligations edged up 0.48% to ₱383.23 billion from ₱381.41 billion at end-March. The increase was largely attributed to the impact of peso depreciation and third-currency movements on the valuation of external guarantees.

READ: